A theatrical
film is slated for 2007 with a possible relaunch of "The Muppet
Show" to follow.

Courtesy
of The Associated PressMay
19, 2005

Kermit
the Frog dangles by his spindly legs in the hallway of a Walt Disney
Co. office here, his red-felt mouth slightly ajar and his ping-pong
ball eyes staring blankly at the floor. Like so many aging stars,
the iconic Muppet has struggled in recent years to find a role for
himself, only to be relegated to ancient re-runs and B-list movies.

Now,
Disney is making a bid to return Kermit to stardom. After a marathon
courtship, Disney last year added
Kermit and his co-stars from the 1970s television hit, "The
Muppet Show,'' to its coterie of characters for the seemingly modest
sum of around $75 million. Done right, Disney thinks Kermit's troupe
could become a classic like Mickey Mouse. "I've always been
convinced that there are three real characters that have enduring
entertainment value, that are evergreens: Mickey, Winnie and Kermit,''
says Disney Chief Executive Michael Eisner, who has led the chase
for the Muppets ever since the characters' creator, Jim Henson,
was first looking for a television network to back his show.

The
big challenge: making the 50-year-old frog relevant to today's audiences.
Disney's plan is to start by dusting off Kermit, Miss Piggy and
other Muppets with a "soft'' launch designed to appeal to a
nostaglic adult audience.

The
first test comes tomorrow, with "The
Muppets' Wizard of Oz,'' a made-for-television movie, on Disney's
ABC network, starring Kermit as a singing and dancing Scarecrow,
Miss Piggy as the witches, the R&B singer Ashanti as Dorothy,
and Pepe the Prawn in the role of her dog, Toto. Instead of the
wide-eyed innocent in the 1939 movie, the new Dorothy wears Manolo
Blahnik shoes, talks about Kabbalah and wants to be a pop star.

In
the runup to the movie, Disney has been priming Muppets fans in
their 20s, 30s and 40s with cameo appearances meant to restore some
of the original TV show's hip, irreverent lustre. In December, for
instance, Kermit appeared alongside Robert De Niro on NBC's "Saturday
Night Live,'' and ABC has been running a series of ads for the coming
"Oz'' movie featuring the characters in scenes based on its
hit shows "Desperate Housewives'' and "Lost.'' Miss Piggy,
meanwhile, modeled a Prada dress in the British fashion magazine
Pop. Kermit was featured at the wheel of the latest BMW, zipping
across a desert, in German television commercials.

In
the works for summer: a line of retro-hip Muppets apparel, including
green T-shirts with glitter-encrusted images of Kermit. And Disney
will trot out various TV shows, such as "America's
Next Muppet,'' a reality-style contest in which new characters
vie for a spot in the Muppets lineup.

After
the characters find their feet, Disney plans a "hard'' launch,
broadening the appeal to a wider audience including younger children,
starting with a feature film in 2007. Then, if everything goes to
plan, the floodgates will open to such things as stage plays, ring
tones, theme-park attractions, TV specials and a possible relaunch
of "The Muppet Show'' itself. "This is franchise that
will ultimately appeal to most age groups,'' said Chris Curtin,
general manager of Disney's Muppets Holding Co., who is leading
the launch.

Despite
the frantic schedule, Disney says it is taking things slowly. It
estimates that by 2009 the Muppet brand will generate around $300
million in retail sales from consumer products including apparel,
books and toys. "Patience is the key here,'' says Andy Mooney,
chairman of Disney's consumer-products division, which oversees
the Muppets Holding Co. "We don't want to create a flash in
the pan.''

The
heart of Disney's strategy is to take the Muppets back to their
roots in the TV show, in which Kermit sang classics such as "It's
Not Easy Being Green,'' and fended off Miss Piggy's advances. When
Mr. Henson created the Muppets in the 1950s, he pitched them for
adults, albeit with a child friendly tone.

After
appearances on shows such as "The Ed Sullivan Show,'' Kermit
the Frog became a star on "Sesame Street,'' which went on the
air in 1969. After "The Muppet Show'' started airing in 1976,
Kermit made fewer "Sesame Street'' appearances, although other
Muppets, such as Bert and Ernie, remained as mainstays of the educational
show. Since Mr. Henson's death in 1990, however, "The Muppet
Show'' characters have been increasingly directed at children -
a strategic turn many people blame for their recent flops.

The
question now is how far Disney is willing to push the boundary -
especially in an era when a movie like "Team America'' last
year featured puppets engaging in behavior that would have been
unspeakable 25 years ago. Disney envisions the Muppets occupying
a space similar to that of Pixar Animation Studios Inc.'s animated
fare or TV's "The Simpsons.'' With one caveat: "They'll
stay away from politics and religion,'' Mr. Eisner says. "The
Muppets have a certain modicum of innuendo. They're not gratuitous.''

Mr.
Eisner has waited a long time for this moment. As an executive at
ABC in his 20s in the late 1960s, he recalls, he was eager to put
the Muppets on the network. But like many suitors, ABC wanted the
Muppets to be a broader children's property. Mr. Henson was determined
not to change the tone of the Muppets, and he went into business
instead with the British TV mogul Lew Grade. "The Muppet Show''
was syndicated around the world and launched Kermit as an international
star.

After five seasons,
though, Mr. Henson decided to move on. He made some Muppet movies
but then turned his attention to other projects. Still Mr. Eisner
kept in contact with him and in 1990 struck a deal to buy the Muppets.
On the day of signing, though, Mr. Henson died of a rare bacterial
infection and Mr. Eisner's deal fell through.

Ultimately,
the children felt the characters belonged in a bigger media company
that could leverage the brand. Disney was an obvious choice; while
Mr. Eisner's deal fell through, Disney had worked on other Muppets
ventures, including a theme park ride. "We fully intend to
work together going forward,'' says Brian Henson, co-chairman of
the Jim Henson Co.

For
Mr. Eisner, the launch comes as he prepares to hand over the reins
to incoming CEO Bob Iger. "The irony is I've been trying to
get this for 40 years,'' Mr. Eisner says. "I'll still be rooting
for them from the outside.''

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